DO SERVICE LEVEL AGREEMENTS MATTER FOR CLOUD COMPUTING ADOPTION? A TRANSACTION COST MODEL

This research was based on the transaction cost economics theory with focus on uncertainty, asset specificity and transaction cost. Service level agreement (SLA) uncertainty and SLA asset specificity were introduced by this... [ view full abstract ]

This research was based on the transaction cost economics theory with focus on uncertainty, asset specificity and transaction cost. Service level agreement (SLA) uncertainty and SLA asset specificity were introduced by this research and used to determine the technical and non-technical attributes for cloud computing SLAs. We found that business users of cloud computing have some uncertainties about SLAs, however, these uncertainties do not seem to have significant impact on the decision to use cloud computing services. On the other hand, we confirmed that business users would prefer to have the attributes of the SLA more highly specified in the agreement. There seemed to be a high correlation between the specificity of the SLA and the adoption of cloud computing services. The research also showed that there are still concerns and uncertainties in the business domain about the general security of the cloud. Finally, this research highlighted the SLA attributes that could impact wide scale adoption of cloud computing services by business users.